Before making a gift, potential donors will have questions for your organization. Donors initially rely on word-of-mouth information, as well as what is available online and in your 990 filing. When they connect with your organization, donors’ knowledge of your organization and mission will vary, and you need to be certain they understand and find value in your story. Here are top questions on the minds of donors and guidance to help your organization answer.
1. What does your organization do?
Why Donors Ask: It could be to hear the information for the first time, or donors may be interested in confirming their existing knowledge of your organization. Donors want to make sure your organization’s values and mission align with theirs. It is up to you to be able to share your organization’s case for support. The ability to articulate the two-minute version of who you are could be the start of a longer conversation.
Be Prepared to Answer: Have your “elevator pitch”, a brief, comprehensive, and compelling description of your organization and its mission, ready. This should be straight to the point and include what you do and who you serve. As your organization grows and evolves, remember to revisit your story. Don’t be afraid to end your pitch by asking what the donor is experienced in or is interested in supporting.
2. What makes your organization different?
Why Donors Ask: Donors want to understand what sets your organization apart from the other 1.5 million nonprofits in the United States1 , and how your organization’s mission is impacting the community in a unique way.
Be Prepared to Answer: Shine a light on how you distinguish your organization from similar organizations. Programmatically, culturally, operationally, philosophically – these are just a few ways in which you can differentiate your organization. Strong explanations can make the difference in funding.
3. Why should I give to your organization?
Why Donors Ask: Donors want to understand your mission and vision, and how your organization will translate their gift into real impact. If you’re an established nonprofit, donors want to see how your organization’s history demonstrates progress towards achieving your mission. If you are just starting out, it is important that they know you have a strategic plan in place.
Be Prepared to Answer: Having a well-kept and easy to read strategic plan can help your prospective donor understand where you are going, and how they can help you get there. Make sure every member of your organization—from volunteers to board members— understands and can convey your why. Talk about why your mission is critical, the programs and services you implement to achieve your mission and how your organization transforms the lives of those you serve. Pull highlights and factual data to back up your case for support. Here is where the passion for your mission needs to come through. At the end of your answer, the donor should understand the impact of their contribution.
4. How do you measure your impact, and how will you keep me updated?
Why Donors Ask: Access to good impact data allows the donor to be a part of the narrative that is created by their initial donation and see the value in giving further gifts. Donors want specific examples of how their contributions impact your mission, such as allowing for expansion or execution of a program or the ability to hire and retain staff.
Be Prepared to Answer: Providing transparent reporting to donors can go a long way in increasing their confidence in your organization and building a strong relationship. Data should play an integral role in your organization’s decision-making, strategic planning, and donor acquisition practices. Impact data will look different for every organization, but it is important to have processes and a strategy in place for collecting and presenting the information. It could be a newsletter, email marketing, an annual report, or all the above.
5. Who makes financial decisions, and what is your board’s composition?
Why Donors Ask: Donors want to understand the full picture of your nonprofit, including how decisions are made and whether you have the support and strategic guidance that indicates a high-functioning organization. A donor may want to know more about your board’s composition, specifically diversity and member’s backgrounds and experience. They may also be looking for information about how the board’s decision-making is influenced by those impacted by the issues the organization is focused on.
Be Prepared to Answer: Responding to this question provides a terrific opportunity to focus on your organization’s leadership, including your board, investment committee, and Executive Director. Make it clear who is responsible for financial decisions, who safeguards the process, and who oversees/monitors it at the highest level. Additionally, share any procedures you have in place that will create a sense of confidence in your donor, like board succession planning and measures to safeguard board engagement.
6. What can you tell me about the financial health of your organization?
Why Donors Ask: Donors want to know if your organization has the cash flow to sustain its mission and operations, whether through regular ongoing donations or big one-off gifts and major capital campaigns. Donors want to understand the diversification and concentration of your revenues.
Be Prepared to Answer: Provide transparency for donors by including your 990s, audited financial statements, and annual reports on your website. Additionally, you might consider using Schedule O on your 990 filing to provide supplemental information. It is important to paint the full picture of your financial health – both the positive aspects, and the challenges you face. Being able to articulate sustainability and growth is crucial, so consider including key financial data points or ratios in your pitch. For example, knowing your program expense ratio, current ratio, and cash reserve ratio could help convince a prospective donor that your organization has a good understanding of your financial position and thus are strong stewards.
7. How do you protect donors’ classified information?
Why Donors Ask: Payments, distributions and transfer fraud attempts are widespread across all industry types because of email compromises and malware infections. Understanding how these fraud schemes are designed to compromise your organization and prevent them are critical. Because nonprofit organizations hold a significant amount of data on their donors, including important financial information, they can be a prime target for hackers. Further, many nonprofit organizations are soft targets, given budget limitations around areas like network security and technology.
Be Prepared to Answer: Explain what processes you have in place to protect donor information. Familiarize yourself with the 5 Es of Cybersecurity and be ready to communicate your plan to prospective and current donors. Following best practices for cybersecurity and data storage can help minimize the risks of a breach.
1. Establish well-defined, repeatable procedures to develop controls and mitigate risks. Simple practices, such as utilizing two-factor authentication on your social media or banking accounts, is one of several ways to enhance your organization’s cybersecurity posture.
2. Enforce procedures. Cybersecurity measures should be included in the onboarding of all roles at all levels of your organization, supplemented by regular training and communications.
3. Educate employees on current and emerging threats and how to spot red flags.
4. Empower your team to report suspicious activity. Have processes in place so that staff know who to reach out to when they have concerns.
5. Evolve and enhance your procedures as security and risks change.
8. Who is your typical donor?
Why Donors Ask: Donors feel more confident in donating to your organization when they know there are others with similar values contributing to your cause. Donors may want to know if your support comes from individuals, government sources, corporations, or foundations, as well as if there is any operational/earned revenue.
Be Prepared to Answer: A representative donor list and key demographic information can be valuable in instilling confidence in a future donor – have a few cases ready to share around your key donors, how they got connected to your mission, and different ways they support your organization. Be sure to accentuate your donor base’s diversity, while also sharing their unity in supporting your nonprofit. This can help reassure potential donors that your organization has been vetted and approved by various sources.
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Source
1. As of March 13, 2023: https://www.zippia.com/advice/nonprofit-statistics/
